Legal Issues in Hiring and Firing Employees

May 28th, 2019, 2:00 PM

Your business is growing and you find yourself in need of help. Familiarizing yourself with some basic employment law principles can save you money and help avoid problems. Before hiring any employees, you may need to draft an employment contract. An employment contract can cover such issues as specific job duties, periodic pay increases, overtime, and your expectations for your employees' behavior while on the job.

Although Pennsylvania is an "employment at will" jurisdiction, meaning that an employer may fire an employee any time without giving a reason, an employment contract can protect both you and your employees if you must fire someone. If you have set forth specific expectations for your employees, you can avoid potential lawsuits and unemployment claims if you can document an employee's failure to perform, or if your employment contract clearly states the circumstances under which an employee may be fired.

After you have a draft of an employment contract in place you can begin to interview prospective employees. While you are free to choose your employees, federal and state laws prohibit discrimination on the basis of gender, sexual preference, race, religion, or nationality. Additionally, prospective employers are prohibited from asking certain questions during job interviews, including questions related to the above listed issues. In 2015, Target paid $2.8 million to settle a lawsuit alleging discrimination in its hiring practices, based on questions asked of prospective employees.

Depending on the size of your business, you may be subject to federal and state regulations regarding unemployment insurance, workplace safety, accommodations under the Americans With Disabilities Act, and others. All employers must also comply with federal immigration laws for verifying that all employees are eligible to legally work in the United States. Employers must also be aware of deferral and state income tax withholding laws.

If you do find it necessary to fire an employee, you must abide by the terms of your employment contract, if you have one. If not, you may find yourself involved in costly and time-consuming litigation. If you do not have an employment contract you are still subject to federal and state employment discrimination laws. Understanding what is not permitted before you fire an employee will save you time and money. The U.S. Equal Employment Opportunity Commission website tracks employment discrimination lawsuit verdicts and settlements nationwide and provides valuable information on categories of impermissible employment discrimination.

The best time to consult an employment attorney is before you hire your first employee, but it's never too late to get started. Call us at (814) 315-9255 or contact us here for more information.

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